Mar 24, 2014

Can Design Save Silicon Valley?

Cost, speed and power have been three of the strategic determinants of customer engagement - and, by extension - institutional success over the past half century.

They have served as a kind of dominant hierarchy of consumer needs, based on the perception that the ratio of cost to power and speed provides the inducement to extend one's individual or organizational reach and impact sufficiently to justify the expense and the inevitable disruption that change brings with it.

But, as the following article explains, our reasoning may be undergoing a shift as well. Customer expectations shaped by a growing sense of entitlement when it comes to those three factors have permitted consideration of new kinds of impetus. We are only surprised when our devices and the technology behind does not deliver new and even greater wonders. Whether it is the purchase decision itself or the anticipation of enhanced performance that flows from it, we are looking for more and are determined to find it.

The impetus most likely to drive decision making in this new order is design. This is not a superficial desire based on color or shape, though neither is inconsequential and both can be influential. In a world in which 'look and feel' can be the subject of multi-billion dollar sales efforts - and related lawsuits - how something feels may influence how we perform. Our comfort and understanding are directly related to our ability to compete, especially in a global, technologically-driven economy in which we may not possess the cultural advantages that language or color used to convey automatically.

We are beginning to witness the practical effect of this change when we see Apple - everyone's design avatar - introduce two new phones simultaneously, one more expensive than the other. When the more expensive device outsells the less expensive one, we sense in monetary terms the power of that shifting decision-scape.

The tech world understands this and is attempting to grasp its implications. Apple's financial success across the breadth of its product offerings is too extreme not to engender notice. But the larger point may be that our own success is now tied to a broader set of value drivers less dependent on the physical and more inspired by the intangible. JL

Jules Pieri comments in Harvard Business Review:

We don’t yearn for the
bigger, brighter or even cheaper as much anymore. We now choose based upon
design – the answer to “how it feels” versus “how fast it is.”

The tech titans of Silicon Valley are actively circling the strategic value
of design. I didn’t take their interest seriously until I saw the news in December that John Maeda, the former
President of the Rhode Island School of Design, joined venerable VC firm Kleiner
Perkins. He’s the Valley’s first-ever Design Partner. That’s a serious step
into the mover-shaker circle for the design profession.
The reasons for an investor focus on design are not all that hard to
understand. “Great design” has helped drive Apple’s valuation to $475 billion,
while AirBnB, Square and Pinterest all demonstrate how superb user experience
design attracts both rabid fans and VC investment (over $1 billion between them,
to date). Last, but far from least, is Google’s $3.2 Billion acquisition of the
design-centric Nest, maker of a smart thermostat.
Appreciation for design in the tech world didn’t come overnight; it has been
on the rise for some time. As the first industrial designer to graduate from
Harvard Business School, I thought design had hit the big time a few years ago,
when the students at my alma mater created a Design club. By contrast, when I
was an MBA there our case studies (and those at every b-school) presented new
products as originating from some kind of immaculate conception. Design was not
an actor in the business dramas we studied. The school’s appreciation for
design’s strategic importance has come a long, long way since those days.
But when I hit the road in 2008 raising capital for our fairly design-centric
venture, The Grommet, I noticed that no investor ever remarked on my industrial
design credentials. Venture capitalists were far more accustomed to the
expertise of a software developer or even a mechanical engineer than to a person
who could create the overarching user experience. This lack of familiarity with
design was bizarre, but also deeply familiar to me. When I first told my own
father the name of my college major, he thought that industrial design meant
creating factories.
While I long ago stopped worrying about when design would be invited to sit
at the grownups’ table, I couldn’t help but be excited by the news that Maeda
was joining Kleiner Perkins. He has blogged about his early observations at Kleiner,
arguing for design’s potential in the tech world:

The marginal excitement generated by more memory or faster processor speeds
has lost its allure in recent years because there’s generally enough computing
horsepower to do everything we might want to do. So we don’t yearn for the
bigger, brighter or even cheaper as much anymore. We now choose based upon
design – the answer to “how it feels” versus “how fast it is.”

I reached out to Maeda to ask about how he was finding the position, and he
responded that in week four on the job he had given an hour-long presentation on
design and tech to all of Kleiner’s partners. “Given the strong, positive
response after my presentation, it’s clear that there’s a there-there,” he
wrote.
I’m sure I speak for design-oriented entrepreneurs everywhere when I say that
it’s about time.

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As a Partner and Co-Founder of Predictiv and PredictivAsia, Jon specializes in management performance and organizational effectiveness for both domestic and international clients. He is an editor and author whose works include Invisible Advantage: How Intangilbles are Driving Business Performance.Learn more...